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The Weird, Extremely German Origins of the Wirecard Scandal

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The Weird, Extremely German Origins of the Wirecard Scandal

How politicians, regulators, and the media fell for an obvious financial fraud

New Republic,

5 min read
3 take-aways
Audio & text

What's inside?

The Wirecard scam reveals much about the German economic psyche.


Editorial Rating

7

Qualities

  • Eye Opening
  • Overview
  • Background

Recommendation

Is Germany a true economic tour de force? Or does the complex interrelationship between industry and politics – which touts the German Wirtschaftswunder while a code of silence mutes its failures – make it a tour de farce? In explaining Wirecard’s seemingly inexorable rise and ultimately predictable fall, professor Adrian Daub deftly examines how German national and commercial pride, beneath a veil of parochialism, perpetuated an ongoing blindness to the Wirecard imbroglio. 

Summary

The Wirecard fraud was a long time in the making.

Digital payments processor Wirecard, founded in 1999, was poised to soar to global heights. A rarity in German business, the firm’s rapid ascent had made it a venture capitalist’s dream.

Yet hints about deceptive accounting practices started emerging in the early 2010s. In 2015, The Financial Times began a series of reports on company chicanery that included misrepresentations of assets and transactions. In response to each article, Wirecard’s stock price would swoon.

German officials’ take on the scandal was an exercise in denial.

About the Author

Adrian Daub is a professor of German studies and comparative literature at Stanford University.


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